Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 51, No. 3, pp.567-587
ISSN: 1226-1874 (Print)
Print publication date 30 Jun 2022
Received 13 Sep 2021 Revised 10 Jan 2022 Accepted 11 Jan 2022
DOI: https://doi.org/10.17287/kmr.2022.51.3.567

Do CEO Political Connections Affect the Deal Duration of Cross-border Acquisitions? Evidence from China

Xiaoyuan Li
(First Author) Yonsei University, School of Business xiaoyuan.li@yonsei.ac.kr
최고경영자의 정치적 연계가 국제인수합병 거래기간에 영향을 미치는가? 중국 인수 기업을 중심으로


Copyright 2011 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper aims to explore whether and how CEO political connections affect the duration of cross-border acquisition deals involving emerging-market acquirers. Drawing upon the human capital theory and institutional theory, this study proposes CEO political connections as the human capital for the strategic resources of the emerging-market acquirers to fill institutional voids. Using the Heckman selection model, the hypotheses were tested with cross-border acquisitions by Chinese acquirers from 2011 to 2016. The results show that acquisition deals take less time to complete for acquirer CEOs with political connections than for acquirer CEOs without political connections. Moreover, high marketization of the home region and high governance quality of the host country weaken the negative association between CEO political connections and acquisition duration.

Keywords:

Cross-border merger and acquisition (CBM&A), Heckman selection model, Political connection, Human capital theory, Institutional theory

Acknowledgments

This research was supported by the ‘BK21 FOUR (Fostering Outstanding Universities for Research)’ in 2022.

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∙ The author Xiaoyuan Li is currently attending the Ph.D. in International Business at Yonsei University. Her research interests lie in international business, emerging market, and international HRM, etc.